Correlation Between Diamond Hill and Legg Mason
Can any of the company-specific risk be diversified away by investing in both Diamond Hill and Legg Mason at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Diamond Hill and Legg Mason into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Diamond Hill Investment and Legg Mason, you can compare the effects of market volatilities on Diamond Hill and Legg Mason and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Diamond Hill with a short position of Legg Mason. Check out your portfolio center. Please also check ongoing floating volatility patterns of Diamond Hill and Legg Mason.
Diversification Opportunities for Diamond Hill and Legg Mason
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Diamond and Legg is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Diamond Hill Investment and Legg Mason in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Legg Mason and Diamond Hill is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Diamond Hill Investment are associated (or correlated) with Legg Mason. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Legg Mason has no effect on the direction of Diamond Hill i.e., Diamond Hill and Legg Mason go up and down completely randomly.
Pair Corralation between Diamond Hill and Legg Mason
If you would invest 15,699 in Diamond Hill Investment on January 19, 2024 and sell it today you would lose (910.00) from holding Diamond Hill Investment or give up 5.8% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 0.0% |
| Values | Daily Returns |
Diamond Hill Investment vs. Legg Mason
Performance |
| Timeline |
| Diamond Hill Investment |
| Legg Mason |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Diamond Hill and Legg Mason Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Diamond Hill and Legg Mason
The main advantage of trading using opposite Diamond Hill and Legg Mason positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Diamond Hill position performs unexpectedly, Legg Mason can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Legg Mason will offset losses from the drop in Legg Mason's long position.| Diamond Hill vs. Federated Premier Municipal | Diamond Hill vs. Blackrock Muniyield | Diamond Hill vs. NXG NextGen Infrastructure | Diamond Hill vs. Federated Investors B |
| Legg Mason vs. Cedar Realty Trust | Legg Mason vs. Stepstone Group | Legg Mason vs. Shagrir Group Vehicle | Legg Mason vs. Nasdaq Inc |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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